Updated from 12:56 p.m. EDT
Citing disappointing sales in North America,
warned Friday that it would likely report weaker-than-anticipated revenue and a net loss for the latest quarter, sending the software maker's stock price plunging.
Hyperion Solutions attributed the expected shortfall in its fiscal first quarter results to a lack of "sales-force focus" and poor execution, saying nothing about corporate demand for its software that analyzes electronic-business initiatives and supply-chain data.
The Sunnyvale, Calif.-based company said it expected total revenue of $110 million to $115 million as well as a net loss when it announces its quarterly results, scheduled for Oct. 24. Analysts had predicted a profit of 15 cents a share, according to
First Call/Thomson Financial
"After two solid quarters, it's like after half time we came out of the locker room a bit flat," Jeff Rodek, chairman and chief executive of Hyperion, told analysts in a conference call Friday. "And maybe even a bit overconfident."
Shares of Hyperion, which was formed after the 1998 merger between
, finished Friday regular trading down $7.38, or 38%, at $12. The stock is down more than 80% from its 52-week high of $65, which was reached in March.
Hyperion's business analysis software, aimed at improving efficiency and identifying profit opportunities and performance problems for companies doing business online, is used by a range of companies, from computer maker
to package delivery company
United Parcel Service
Analysts had mixed views about the outlook for Hyperion. Jon Moody, an analyst at
BB&T Capital Markets
, said that although many Internet companies have scaled back their spending, leading brick-and-mortar companies to pull the reins back on their Internet projects as well, the appetite for Hyperion's services should remain strong.
"The whole trend toward e-business is certainly going to happen," said Moody, who had forecast total revenue of $128 million and earnings of 14 cents a share for the fiscal first quarter ending Sept. 30. Moody has rated Hyperion's stock a strong buy, and his firm has not done any underwriting for the company.
Hyperion's Rodek suggested in the conference call that the widely discussed slowdown in the dot-com sector would not badly hurt the company because its base of roughly 6,000 customers is very diverse. "We're not overly reliant on one segment," he stressed.
Gary Abbott, who follows Hyperion for
Punk Ziegel & Co.
, said the company's current problems were largely internal, although some broader issues, like a slowing economy, could begin to affect demand for Hyperion's software.
"I would say at this point it's more of a micro issue," said Abbott, who has rated the stock a buy. "But you have to wonder if this is foreshadowing something else. When there's a sickness going around, the weakest members of society catch it first."
Despite pessimistic expectations, "we believe that our business strategy is sound, and that our difficulties were primarily in execution," Rodek said in a statement.
Rodek said the company would have a "more complete picture" of its financial situation after making a thorough analysis over the next three weeks, and added that "as CEO he was ultimately responsible" for allowing the company to miss its revenue targets.
Seeking to reassure analysts, Rodek also said his company had taken steps to address the sales-force problems and that senior management would gather next week to discuss the issue.
"They're analyzing their performance right now," said Abbott, whose firm has not done any underwriting for Hyperion. "They wanted to tell the world, but they didn't have the detail that investors need."